Kirit Ramanlal Shah, Pune V. The Assistant Commissioner of Income Tax , Circle-3, Pune

ITA 965/PUN/2023

AI Insights

The case involves Kirit Ramanlal Shah, the appellant, contesting an order from the National Faceless Appeal Centre (NFAC) regarding the assessment year 2011-12. The primary contention was the non-adjudication of specific grounds (Nos. 2 & 3) in the NFAC's order, which pertained to the merits of the issues raised by the assessee. These grounds challenged the legality of the assessment order passed under sections 143(3) read with section 147 of the Income Tax Act, arguing it was void ab initio for various reasons including the lack of adherence to natural justice and failure to provide necessary documents and opportunities for cross-examination. The ITAT found that these grounds were not general in nature and required specific adjudication, thus remanding the entire matter back to NFAC for a comprehensive re-evaluation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 138072 (ITAT-PUNE)
• Duration Of Justice: 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 30-08-2023
• Other Referred Cases: GKN Driveshafts India Ltd Vs. ITO
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE „A‟ BENCHES :: PUNE BEFORE SHRI R.S. SYAL, HON. ACCOUNTANT MEMBER & SHRI PARTHA SARATHI CHAUDHURY, HON. JUDICIAL MEMBER ITA No.965/PUN/2023 (A.Y. 2011-12) Kirit Ramanlal Shah, C/o Acropolis, 3 rd Floor, 1076/20, Gokhale Road, Shivajinagar, Model Colony, Pune, Maharashtra. PAN: ADWPS 9391 P vs ACIT, Circle-3, Pune. Appellant Respondent Assessee by : Shri Suhas P Bora, CA Revenue by : Shri Ramnath P. Murkunde, DR Date of hearing : 21/09/2023 Date of pronouncement : 22/09/2023 O R D E R Per PARTHA SARATHI CHAUDHURY, JM: This appeal preferred by the assessee emanates from the order of National Faceless Appeal Centre [NFAC], Delhi, dated 31.07.2023 for A.Y.2011-12 as per the grounds of appeal on record. 2. At the outset, ld.AR for the assessee submitted that NFAC has not adjudicated ground Nos. 2 & 3 in the appeal and that the assessee is aggrieved for such non-adjudication of these grounds since they deal with merits of the issues. 3. We observe at page 7 of the NFAC‟s order where the grounds are mentioned and therein ground Nos. 2 & 3 to 5 have been reproduced ITA No.965/PUN/2023 Kirit Ramanlal Shah 2 as follows:- “2. The assessment order passed U/sec.143(3) r.w.s 147 is bad in law and void ab-initio, since it is passed: a) Without following the principles of natural justice. b) Without giving the reasons recorded for reopening the assessment c) Without providing with the copy of documents relied upon d) Without verifying the submissions and evidences submitted by appellant. e) Without establishing any live link between appellant and the alleged entry providers statement. f) Without giving the opportunity of cross examination of third parties whose statements have been relied upon by the A.O. g) Without following the principles laid down by Apex Court in case of GKN Driveshafts India Ltd Vs. ITO for reopening of assessment proceedings 3. The learned AO has erred in law on reopening the assessment based on information received from Investigation Wing of Department which constitutes an opinion and not tangible material which is necessary for reopening. The learned AO on the facts and the circumstances of the case and in law has erred in treating the speculation loss as non-genuine without any concrete evidence. The learned AO considered the speculation loss of Rs.2,01,45,307/- from the commodity transaction on the basis that the broker was expelled from the commodity exchange which cannot be the criteria to hold the transaction as bogus without the name of the assessee being involved in it. 4. Ground No.6: On the facts and in the circumstances of the case and in law the learned A.O. erred in making an addition of Rs.2,01 ,45,307/- as non-genuine losses by rejecting appellant contention and documentary evidences such bank account statements and the contract notes in support of the transaction brought on record therefore entire addition needs to be deleted. 5. Ground No.7: The learned A.O. erred in rejecting the claim of the assessee on just the basis of applying the modus operandi of NMCE Scam, FMC Order dated 23.07.2011 on financial irregularities in NMCE, Information from the Investigation wing of the Department, Ahmedabad and theory of preponderance of human probabilities/ tax planning by eneralizinq it to the case of assesse without bringing on record any corroborative evidence against the appellant.” ITA No.965/PUN/2023 Kirit Ramanlal Shah 3 Thereafter, NFAC observed at para 5, that the assessee has raised 09 grounds of appeal. Ground Nos. 2, 3 & 9 are general in nature and no specific adjudication is called for. Hence, the same are dismissed. Therefore, the contention of the ld.AR is correct that ground Nos. 2 & 3 raised in the appeal before the NFAC have not been adjudicated. These grounds are not general in nature and, therefore, in our considered view, these grounds should be adjudicated on merits by NFAC and in view thereof, we set aside the said order of NFAC and remand the matter to the file of NFAC for adjudication as per law complying with the principles of natural justice. The NFAC shall not only adjudicate ground nos. 2 & 3, but since for the sake of completeness and consistency, all other grounds are also remanded to their file, so all the issues have to be decided again as per law by NFAC. The grounds of appeal are allowed for statistical purposes. 4. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in open Court on 22 nd September, 2023. Sd/- Sd/- (R.S. SYAL) (PARTHA SARATHI CHAUDHURY) VICE-PRESIDENT JUDICIAL MEMBER Dated : 22 nd September, 2023 vr/- ITA No.965/PUN/2023 Kirit Ramanlal Shah 4 Copy to : 1. The Appellant. 2. The Respondent. 3. The Pr. CIT concerned. 4. The DR, ITAT, “A” Bench Pune. 5. Guard File. By Order // TRUE COPY // Senior Private Secretary ITAT, Pune.